Exploration & Production | Finance & Investing | Capital Markets

Surge Finances Recent Saskatchewan Acquisition

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Surge Energy Inc. has announced that it has closed the previously announced financing detailed in the Company's press release dated January 13, 2014.

The financing was completed in connection with the previously announced acquisition by the Company of certain assets in SE Saskatchewan. The Company issued 11,112,000 subscription receipts of the Company at a price of $6.30 per subscription receipt, for gross proceeds of $70,005,600 as part of a "bought deal" financing with a syndicate of underwriters led by Macquarie Capital Markets Canada Ltd., and including GMP Securities LP, National Bank Financial Inc., CIBC World Markets Inc., Scotia Capital Inc., Dundee Securities Ltd., FirstEnergy Capital Corp., Cormark Securities Inc., TD Securities Inc., and Raymond James Ltd.

The Underwriters have exercised their option to purchase an additional 1,666,800 Subscription Receipts for additional proceeds of $10,500,840. The gross proceeds from the sale of Subscription Receipts will be held in escrow pending the satisfaction of all conditions to the completion of the Acquisition, provided that the closing date of the Acquisition is on or before April 30, 2014, upon which time each Subscription Receipt will entitle the holder to receive one common share, without further payment or action on the part of the holder, upon the closing of the Acquisition. If the Acquisition is not completed on or before April 30, 2014 or is terminated at an earlier time, holders of Subscription Receipts will receive, for each Subscription Receipt held, a cash payment equal to the Offering Price and any interest earned thereon during the term of the escrow.

It is anticipated that the Subscription Receipts will be listed and posted for trading on the Toronto Stock Exchange under the symbol "SGY.O" at the open of markets today, until the conversion of the Subscription Receipts into Common Shares is completed. The net proceeds from the issuance of Subscription Receipts will be used to partially fund the Acquisition. Closing of the Acquisition is expected to occur on February 14, 2014.

The financing was completed by way of a short form prospectus in all of the provinces of Canada and on a private placement basis in the United States pursuant to exemptions from the registration requirements of the U.S securities laws.